Customers walk past an Apple store in New York, US. Apple’s shares jumped 6.37% after forecast-beating results powered a rally in technology stocks ahead of Fed’s latest policy announcement. Image Credit: Reuters

The S&P 500 index notched a fresh record high on Wednesday, as gains in Apple Inc’s shares after forecast-beating results powered a rally in technology stocks ahead of the Federal Reserve’s latest policy announcement.

Shares of the iPhone maker jumped 6.37 per cent after the company said sales in China were steadying and touted how rising demand for its services and accessories helped offset a record drop in iPhone revenue.

The company also announced plans for a new $75 billion (Dh275.44 billion) share buy-back and bumped up its cash dividend by 5 per cent.

Apple’s shares boosted the S&P 500 index, which clocked another record closing high on Tuesday and registered its best four-month rally in nearly nine years.

The technology sector gained about 0.86 per cent, the most among the 11 major S&P sectors.

“It boils down to the fact that Apple’s earnings are certainly better and that is definitely helping things in general,” said Art Hogan, chief market strategist at National Securities in New York.

“It’s a little hard for markets to move up or down much in one of the busiest weeks for catalysts, with 150 S&P 500 companies reporting, the Fed meeting this afternoon so you tend to get a bit of wait-and-see.” Analysts are now more optimistic on first-quarter earnings growth and expect a 0.5 per cent rise compared with a 2 per cent fall estimated at the beginning of April, according to Refinitiv data.

Of the 305 S&P 500 companies that have reported so far, 76 per cent have topped Wall Street estimates.

Besides a largely upbeat earnings season, recent gains in shares have also been powered by positive economic data, a dovish Federal Reserve and signs of progress in US-China trade talks.

Investors will also look for direction on monetary policy when the Fed concludes its two-day meeting later in the day.

The central bank is largely expected to keep borrowing costs unchanged and maintain a ‘patient’ monetary policy stance, despite President Donald Trump’s call to cut rates.

The financials sector, which tend to benefit from a rising rate environment, dropped 0.17 per cent, with S&P banks off 0.23 per cent.

At 11.06am. ET the Dow Jones Industrial Average was up 61.68 points, or 0.23 per cent, at 26,654.59, the S&P 500 was up 3.31 points, or 0.11 per cent, at 2,949.14 and the Nasdaq Composite was up 29.59 points, or 0.37 per cent, at 8,124.97.

CVS Health Corp jumped 5.32 per cent after the drugstore chain operator and pharmacy benefits manager raised its full-year profit forecast after reporting a quarterly profit beat.

Hilton Worldwide Holdings jumped 7.2 per cent, the most among S&P 500 companies, after the hotel operator reported quarterly revenue above analysts expectations.

Energy stocks tumbled 0.94 per cent, weighing the most on the S&P 500, as oil prices touched a session’s low after an unexpected rise in US crude inventories.

In economic data, ADP’s National Employment Report showed private employers added 275,000 in April, higher than consensus estimate of 180,000 additions.

The private survey comes ahead of the much anticipated government jobs report on Friday, which is expected to show fewer job additions last month compared to March.

Declining issues outnumbered advancers for a 1.01-to-1 ratio on the NYSE and for a 1.28-to-1 ratio on the Nasdaq.

The S&P index recorded 39 new 52-week highs and two new lows, while the Nasdaq recorded 67 new highs and 32 new lows.